Oil hesitates as global economic worries offset Reuters

© Reuters. Aerial view shows oil tanks of the Transneft oil pipeline operator at the Kozmino crude oil terminal on the shores of Nakhodka Bay near the port city of Nakhodka, Russia, June 13, 2022. Photo taken by drone. REUTERS / Tatiana Meel

By Florence Tan

SINGAPORE (Reuters) – Oil prices fell on Monday, reversing previous gains as fears of slowing global economic growth and demand for fuel offset fears of slowing supplies.

futures fell 8 cents, or 0.1 percent, to $ 113.04 a barrel by 2:42 a.m. GMT, after rising as much as 1 percent earlier. Prices for the first month fell 7.3% last week, the first weekly drop of five.

US West Texas Intermediate crude was $ 109.49 a barrel, down 7 cents after rising more than $ 1. Last month’s prices fell 9.2% last week, the first drop in eight weeks.

“Obviously, macro factors are driving oil right now, not the fundamental factors that are still supporting,” said Warren Patterson, head of raw materials research at ING.

Russia’s oil, the world’s second-largest exporter, remains inaccessible to most countries due to Western sanctions over the war in Ukraine.

The impact has been partially mitigated by the release of US-led strategic oil reserves and increased production by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC +, although thinning the global buffer against further disruption. of supplies.

“If Washington maintains its current pace, the US strategic reserve will reach a 40-year low of 358 million barrels by October,” ANZ analysts said in a note.

However, oil and gas production in the United States is rising.

The number of oil and gas platforms, an early indicator of future production, rose seven to 740 in the week to June 17, its highest level since March 2020, energy services firm Baker Hughes Co said in a report on Friday. .

In Libya, oil production remains volatile following blockades by groups in the eastern country.

Libyan Oil Minister Mohamed Un told Reuters on Monday that the country’s total production is about 700,000 barrels per day (bpd). Libya’s production has dropped to 100,000 to 150,000 barrels a day, a spokesman for the oil ministry said last week.

Exports of petroleum products from China, once a major exporter, have continued to decline, maintaining stable global supplies.

Gasoline exports from the country in May fell by 45.5% compared to a year earlier, and diesel exports fell by 92.7% despite the slowdown in domestic demand as companies did not meet export quotas, according to data from Chinese customs on Saturday.

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